INTRODUCTION
This research project will analyze the recent changes in the disclosure requirements for income taxes. On July 26, 2016 the Financial Accounting Standards Board (FASB) published for comment a proposed Accounting Standards Update (ASU) on Income Taxes (Topic 740): Disclosure Framework—Changes to the Disclosure Requirements for Income Taxes. The FASB had received 52 comment letters by the due date of September 30, 2016. The Board issued the amendments in the proposed Update on Topic 740 as part of the disclosure framework project. The new ASU would change, add, and cancel previous income tax accounting disclosure standards. The new amendments would include requirements for all entities (public and private) to disclose certain
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They also would have to disclose the line items in the financial statement in which the UTBs benefits are presented and the related amounts of the benefits. Public business entities would also be required to disclose the amount of, and explanation for, a valuation allowance recognized or released during the reporting period.
Furthermore, the proposed ASU will impact all companies that report their financial statements under US GAAP. Some of the disclosure requirements are already part of the current Securities and Exchange Commission (SEC) disclosure requirements, but some disclosure requirements will reveal new information about reporting entities. PricewaterhouseCoopers (PwC) (Spang and Suplee, 2016) warns that “companies should consider how the additional disclosures may be utilized and interpreted by various stakeholders. In addition, compiling the necessary information, particularly for multinational corporations, may be challenging and may require updates to systems, processes, and controls”. Therefore, the implementation of the new standards on the early stages may require additional financial resources from the business entities.
The purpose of this work is to identify strengths and weaknesses of the proposed ASU and whether the new proposed disclosure requirements do
Read the disclosure statement found below or on the Foundations website carefully and answer the questions below. You will need a calculator to complete the activity. Upload your answers to Black Board.
The purpose of this report is to look at the advantages and disadvantages that would occur if the United States were to switch their financial reporting standards from U.S GAAP
Publicly traded companies are subject to the reporting and disclosure requirements of the Securities Exchange Commission (SEC). The laws that govern the securities industry were established to provide transparency to investors, creditors and shareholders alike. According to Hoyle, Schaefer & Doupnik, (2015) there are seven major disclosure requirements, the first being a five-year summary of operations to encompass sales, assets, income from continuing operations. Followed by a description of business activities, a three year summary of industry segments to include foreign and domestic operations, a list of company directors and executives, quarterly market price of common stock for the last two years, restrictions on the company’s ability to continue paying dividends, and finally, an analysis of the company’s financial condition, changes in the conditions and results of operation.
The globalization of business activity has resulted in the need for a uniform set of accounting rules in all countries. With U.S. corporations doing so much business in other countries, it is imperative that the SEC and international regulatory boards devise a set of rules and regulations that would benefit both parties. If this did not happen, international companies would be able to do whatever they wanted without repercussion because of the discrepancies in the differing sets of rules. Accomplishing this universal set of rules would allow companies to list securities in any market without having to prepare more than one set of financial statements. There have been so many
This report discusses the main principle of tax effect accounting and disclosures requirements as defined by AASB 112. It also provides a detailed analysis of Coca-Cola Amatil (CCA)’s annual report compliance with those disclosure requirements and relevance with shareholders and potential investors.
In 1973 the Financial Accounting Standards Board (FASB) was established to set the financial accounting standards in the United States of America for nongovernmental entities. These standards are collectively called U.S. Generally accepted Accounting Principles, or U.S. GAAP. The Securities and Exchange Commission (SEC) and the American Institute of Certified Public Accountants acknowledge the authority of these standards (FASB, n.d). A “proven, independent due process” is used to collect the viewpoints of the financial statements prepares and users for the constant improvement of these standards. An Accounting Status Update(ASU) is not an authoritative source however documents the amendments to communicate the changes in the FASB Codification for a user to understand the reason and future of those changes (FASB, n.d).
SFAC No. 8 addresses the cost constraint on useful financial reporting, “Cost is a pervasive constraint that standard setters, as well as providers and users of financial information, should keep in mind when considering the benefits of a financial reporting requirement.” (SFAC No. 8 BC 3.47) However, the ability to place a dollar value and fully enumerate a cost or benefit is almost an impossible task for standard-setters. Additionally, there is no way to successfully identify and measure all of the economic consequences associated with a new standard. The FASB should be applauded though for advancing uniformity in accounting standards, however; uniform financial reporting suggests a one size fits all approach. “Smaller, non-publicly listed firms (and their auditors) argue that accounting standards are formulated mainly for larger, publicly traded firms” and that “compliance costs are disproportionately higher and the
The requirements of the applicable financial reporting framework relevant to accounting estimates, including related disclosures
AS 3 goes on to state in paragraph A9 that “the documentation requirements in this standard should result in more effective and efficient oversight of registered public accounting firms and associated persons, thereby improving audit quality and enhancing investor confidence”.
The U.S is moving toward IFRS (Forgeas, 2008). In the near future, all US company may need to report financial statements under IFRS. This makes the adaptation of IFRS unavoidable. Recently, some large multinational
As the business environment grows and companies find new ways to expand into their respective - or even new – markets, it is important that reporting standards stay up to date with changes and continue to assist companies in providing their users with useful accounting information. Information is labelled as being useful when it meets the
The Codification’s goal is to clarify the company of thousands of U.S. authoritative accounting announcements published by diverse standard-setters. Therefore, to accomplish this objective, the FASB sponsored a project to incorporate and typically adapt all related accounting publication announced by the standard-setters of the U.S. in conjunction with those of the FASB, the Emerging Issues Task Force (EITF) and the American Institute of Certified Public Accountants
The Financial Accounting Standards Board (FASB) writes the code that directs certified public accountants and accounting professionals in non-governmental environments. On occasions, the FASB proposes changes to those accounting standards. This process includes exposure drafts. The issuance of exposure drafts is for individual and business comments. The input from the respondents in comment letters is analyzed and considered by the board in the deliberations regarding the issue. "Proposed Accounting Standards Update – Presentation of Financial Statements (Topic 205): Reporting Discontinued Operations," published on April 2, 2013, discusses changing the reports to be more useful and reduce costs for preparers. This report will discuss the exposure draft in depth and the comment letters accordingly.
This paper will analyze these views as they apply to the discloser of segment information for public entities as required by topic 280 of the FASB accounting standards codification, and discussed in Statement of Financial Standards No. 131 (“SFAS 131). The paper is structured as follows: Section II provides an overview of the objective and general purpose of financial reporting and the qualitative characteristics off useful financial information as determined by the Financial Accounting Standards Board (“FASB”), section III introduces the concept of segment reporting and outlines the requirements for disclosures of segment information for public companies, section IV evaluates the relevance of
In any business operations, full financial disclosure refers to the provision of the necessary information about a company for better decision making by the people accustomed. It is the financial revelation of a given company. There are some financial disclosures in any business that ensure proper understanding of financial statements to the financial readers, or potential auditors. Examples are the annual financial reports and the financial declarations of the company. The annual financial reports of the enterprise are very useful since they discloses the revenues recognized in the business, and the accountability of the inventories plus the income taxes accounted for during that period of operation. Second, is the disclosure of this financial statements which gives the actual revelation of the company 's stock options, liabilities and the effects of foreign currencies?! This disclosure includes the company 's balance sheet of the year, income statements and also the cash statements flows of that year. This information gives a proper understanding of the financial status users about the effects of inflation and price change on property and inventories (Berger, 2011).